3rd Quarter Report – Hanoi Market

3rd Quarter Report – Hanoi Market

18 Tháng Mười

The gross domestic product (GDP) in the third quarter of 2018 was estimated to increase by 6.88% over the same period last year, although lower than the increase of 7.45% in the first quarter but higher than the increase of 6.73% in the second quarter, showing that the economy still retains its growth momentum. Generally, in nine months of 2018, GDP was estimated to increase by 6.98% compared with the same period last year, this is the highest growth of nine months since 2011. Real estate business moved up by 4.04%.

(Source: General Statistics Office of Vietnam)

The consumer price index (CPI) in September rose 0.59% than previous month. Generally, in the third quarter of 2018, CPI increased by 0.72% compared with the previous quarter and by 4.14% from the third quarter of 2017. Average CPI in nine months of 2018 increased by 3.57% compared with the same period in 2017. In the main commodity groups, there has been notably the increase of 1.77% in fuel group, affected by two times of raising the retail petrol and oil price.

Core inflation in September 2018 increased by 0.14% over the previous month and by 1.61% from the same period last year. Average core inflation in nine months of 2018 moved up by 1.41% compared with the corresponding period in 2017.

Total value of foreign direct investment (FDI), including newly registered capital, increased capital reached US$ 19.67 billion, down by 7.7% over the same period last year. Thus, the total of realized capital in nine months of this year reached an estimate of US$ 13.25 billion, up 6% from 2017’s same period. In nine months of 2018, there were 5,275 turns of capital contribution and share purchase of foreign investors with a total capital contribution of US$ 5.7 billion, a growth of 36.8% against the same period in 2017, of which 788 turns of capital contribution and share purchase increased the charter capital of enterprises with the contributed capital of US$ 1.84 billion and 5,087 turns of foreign investors bought back domestic shares without increasing charter capital with the value of US$ 3.86 billion.

International visitors to Vietnam in the third quarter of 2018 reached 3.7 million arrivals, a rise of 14.9% compared with the same period last year, lower than the growth in the first quarter (30.9%) and the second quarter (23.1%). Generally, in nine months, international visitors to Vietnam were estimated to gain 11,61 million arrivals, an increase of 22.9% over the same period last year. Visitors from Asia reached 9,02 million of arrivals, up 27.2% over the identical period last year; visitors from Europe reached an estimate of 1,53 million arrivals, up 9.8%; visitors from the America reached 6909 thousand arrivals, increasing by 12.5%; visitors from Australia gained 334 thousand arrivals, increasing by 6.3%; visitors from Africa achieved 31.1 thousand arrivals, a growth of 19.5%.

(Source: Vietnam National Administration of Tourism)

APARTMENT

In the third quarter of 2018, there were 09 new projects launched with the total of 3.345 units, increasing the primary supply to 22,437 units. Remarkably in this quarter, the new projects are located all over the city, not be concentrated only in the west and south of the city, as it happended in the past 6 months.

As shown in the graph 2 – the primary supply, it is now Thanh Xuan district with the most projects sold but only ranked fifth in the number of available apartments for sale with many of those were launched long before. This is understandable, as a matter of fact, because Thanh Xuan district has been known as the high-density apartment developments in recent years. Otherwise, in suburban area such as Thanh Tri subdistrict and Long Bien district, there were very few number of projects but a tremendous number of apartments for sale, as a result of numerous land availability.

The number of successful transactions recorded in the third quarter was 6,000, down approximately by 15% QoQ, partly affected by the certain taboo that it is inauspicious to buy, renovate and move houses during the Hungry Ghost month.

(Source: Hai Phat Global Research)

With regard to the price, amongst the newly launched apartments in high-end segment, Hateco La Roma (Dong Da District) and King Palace (Thanh Xuan District) are sold at high average price of 63 – 65 million dong psm (roughly US$ 2,700 – US$ 2,800 psm). With the key selling points that are luxury Intalian interior of Hateco La Roma, Nguyen Trai – main road frontage of King Palace, both developers Hateco and Alphanam introduce their products into the market at the price higher than all the others in the same area.

In the mid-end segment which are always the most highly in demand, the most notable projects embarked upon were FLC Green Apartment (Pham Hung road), Anland Premium (To Huu road) and Bea Sky (Nguyen Xien road) respectively. All of those were sold at the price under 30 million dong psm (roughly US$ 1300 psm).

In September, at Long Bien district, Phuc Dong Housing Development JSC announced officially Hope Residences inside the urban area Vinhomes riverside with 1,196 social housing units for low-income people and 308 commerical apartments. Beside of taking advantage of the amenities in “rich area” Vinhomes Riverside, projects have most of the modern amenities and well-cared landscape, potentially high absorption rate.

Market outlook in the fourth quarter would go into the more dynamic period, because the final months of the year is when the demand to buy a home for Tet holiday rising up. Undertanding this opportunity, real estate developers would bring out all of their products, sale policies to attract customers.

(Source: Hai Phat Global Research)

VILLA, TOWNHOUSE AND SHOPHOUSE

In the third quarter of 2018, the market witnessed the plunge of villa, townhouse supply. Specifically, only 250 units launched, increasing the primary supply to around 2,500 units, down by 25% QoQ. The supply are mostly available in the suburb of Hanoi, Long Bien district gained the majority of 31%, followed by Hoang Mai district, while other areas only occupied around 10%. The number of successful transaction in this quarter reached 30%, of which majority sales of TSG Lotus Sai Dong (Long Bien district), Thuan An Central Lake (Gia Lam).

(Source: Hai Phat Global Research)

The shortage of supply would be mitigated in the next 3 months of 2018, as many projects in the pipeline will be launched, notably Vincity Gia Lam, Athen Fulland, Sunshine Wonderland. Over 10,000 dwellings are estimated to be introduced.